Dismantling rigid structures – changes and drivers in intralogistics

19. May 2016

The large crowd of WoMH visitors who came to hear Florian Heydenreich, Head of Business Development at Linde Material Handling, were treated to a fascinating presentation. The talk’s focus was how the area of intralogistics is changing and the challenges and drivers the changes will bring. Here’s a summary of his presentation, which provides considerable food for thought.

The year 2015 exceeded all expectations. The number of packages transported in Germany increased by 140 million compared to 2014. That’s an additional 400,000 packages each day – an impressive figure.

This alone illustrates the size of the task the logistics industry faces. The number of deliveries continues to increase each year. But it’s not just about rapidly increasing volume – flexibility and ever-shorter delivery times are also factors of growing importance.

In addition to the absolute number of shipments, things are set to become considerably more complex since the shipments will contain a smaller number of very diverse products. In other words, each shipment will be unique and will therefore require material handling processes that are highly flexible.

Changes in intralogistics: five main developments

Heydenreich grouped the coming changes into five developments:

Products will become more customer-specific.

Shipment sizes will decrease.

Delivery times will be shorter.

Manufacturers, suppliers and customers will be more connected.

Logistics will be more complex and shipments more diverse.

Key factors influencing change

Not all countries are facing the same challenges. Yet one key trend is that populations are ageing in developed countries. That means workforces are growing older, which is altering work environments.

This is requiring age-appropriate workplaces and a focus on ergonomics as a way of maintaining performance. In addition, more automation is needed to support employees and augment what they do.

Another factor is of course the increase in digitization, which is a huge challenge for businesses all around the globe. Digitization is spreading at a mind-boggling rate. People are already talking about the “Internet of Things”, which means the ability of ordinary objects to communicate with each other. For intralogistics, that represents nothing more than a step-by-step development toward Industry 4.0, a state of affairs that looks like this:

Systems know each other’s operational status and autonomously optimise their interactions, for example by responding ahead of time to potential bottlenecks in the supply chain. Thinking and working within networks and partnerships will therefore become more important.

Impact on productivity

Heydenreich clearly described the potential offered by increased connectivity and intelligent interactions:

The use of predictive maintenance could reduce maintenance costs by between 10 and 40 per cent, since the right replacement part would always be waiting next to the right machine at the right time. Another example is a reduction in downtime of between 30 and 50 per cent. This is possible thanks to forward-looking capacity planning and the prompt identification of tool wear. This amounts to an increase in efficiency of 18 per cent across all sectors over the next five years. Return on investment cannot, however, be the sole reason for implementing digitized and automated processes. Other considerations are the high levels of throughput as well as quality, safety and ergonomics.

Which responses to these trends does Linde Material Handling offer?

Heydenreich gave several concrete examples of cost-effective responses to the emerging developments:

Climate neutrality and sustainability are becoming increasingly important issues as a result of climate change and the scarcity of resources. Currently 80 per cent of the vehicles manufactured by Linde are equipped with an electric motor – a figure that continues to rise. Since customer processes demand a lot of a vehicle’s battery, innovative technologies like lithium-ion solutions and fuel cells are the wave of the future.

The challenges are giving rise to a number of key safety issues. The financial significance of these issues becomes clear when you consider that the average accident results in approximately €85,000 in costs. In addition to its duty to ensure no one is injured, Linde must work to increase safety levels for economic reasons. Possibilities here include safety hardware and consulting services targeting safety issues.

Connectivity adds value first and foremost by reducing process-related costs. As soon as a vehicle is integrated into a system made up of intralogistic devices and software solutions, customers experience an ongoing, holistic optimisation of their processes – and an increase in value. In a step-by-step process, Linde’s vehicles are therefore offering greater connectivity and are becoming more integrated into their environment.

Connectivity also means less downtime. In the future, wireless technology will be used to diagnose the problem and identify a solution even before the technician leaves for the service call. There will no longer be a need for lengthy discussions on site. And since the technician will know exactly what to bring along, there will be little time spent waiting for replacement parts.

In the area of automation, autonomous vehicles can now get to know their environment and respond to it. If the environment changes because capacity is expanded or structures are improved, the vehicles quickly learn what is new and react accordingly. One recent develop even makes it possible for vehicles to identify obstacles and avoid them. Autonomous vehicles can prevent incorrect deliveries and damage during transport. They can also increase the transparency of material flows and can be deployed in challenging situations such as low-temperature or dangerous environments.

In addition, fewer and fewer areas exist in which a very clear distinction must be made between processes requiring manual and automated solutions. Intelligent partnerships between humans and robots will play a greater role, as will the automated transport of small loads.

Let me end this summary with the following quote, which offers a very enticing glimpse of what’s coming:

Intelligent solutions, e.g. the intelligent factories of the future, are characterised by their adaptability, resource efficiency, ergonomic design and the integration of customers and partners – all of which speaks for including flexible processes in value streams.